The rise of private permissionless blockchains — part 1

When I tell fellow blockchain developers and enthusiasts we have a permissionless private blockchain solution, they typically make a strange face, followed by “Did you mean public permissionless?”.

I get it. Something being both private and permissionless sound like a contradiction. So what’s going on?

To understand the concept, let’s first look at the difference between public permissioned and permissionless blockchains.

On a public permissioned network like Ripple or EOS, the network maintainer has the ability to appoint privileged parties. These are able to run a node with abilities that are unavailable to the general public.

On a permissionless public blockchain like Ethereum, such an authoritative party does not exist. Anybody can spin up a node and join the network to broadcast transactions or mine blocks.

Still, it’s possible that there are things that I’m allowed to do on the Ethereum network, while you are not. In a smart contract, we can define an action that may only be performed by the contract’s owner and not by others.

So a permissionless blockchain means there is no authority on a network level. The logic deployed on the chain, in the form of a smart contract, does define permissions.

Similar to the public permissionless network, anyone can spin up a node to join a private permissionless network. However, unlike on a public blockchain, other nodes will only acknowledge its existence, but not share any data. At least not just yet.

The smart contracts on these private networks, not only define who is allowed to perform contract actions but also who is allowed to read the contract and all related data.

To accomplish this, private permissionless solutions don’t create a single chain shared by everyone. Instead, each instantiation of a smart contract has its own ad-hoc chain. In other words;

Deploying a smart contract on a permissionless private network automatically creates a private (side-)chain associated with that contact.

A single node holds multiple of ad-hoc chains, but never all of them. You might compare it to git, where a single system holds multiple repositories.

Read privileges aren’t granted to specific nodes, but to specific persons or organizations (identified by a cryptographic signature). This is similar to the privilege to perform a smart contract action on Ethereum.

Each contract has a unique identifier (or address). Nodes also have an address in the form of a URL. To get a copy of a contract and the associated chain, you need to know both the contract identifier and the URL of a node that has a copy.

You can use any node, possibly your own or just one you trust, to request a copy of a private ad-hoc chain and start participating on the contract. A node only holds the data it needs to service its users, rather than all information on the network. This approach is coined by Holochain as agent-centric solutions.


There are a lot of different types of problems you can solve with such a system, that you can’t tackle with a private permissioned or with public solutions.

With that in mind, this space seems to be highly undercrowded. I’m only aware of three active projects with a private permissionless component.**


Arguably the best know platform in this space is Holochain. A platform for decentralized applications, where users share information peer-to-peer on a need-to-know basis.

Holochain abandons the shared hash chain altogether in favor of treading transactions as individual entities which can be validated through a distributed hash.

LTO Network

Our project, LTO Network, is a platform to run trustless workflows, targeting multinationals and governments. The process has a strong focus on privacy and GDPR compliance.

LTO Network replaces smart contracts with Live Contracts, which define both on-chain logic and off-chain instructions.


Monet is a project for building ad-hoc, short-lived chains, with mobile devices acting as nodes for the participants.

Collaborations are fluid as both participants come and go and nodes may be discovered based on location.

To be continued

This article only scratches the service of this topic. In follow up articles we’ll dive deeper into the type of applications that benefit from a private permissionless chains and discuss the specific challenges such networks have. We’ll also do a more in-depth analysis of these three projects comparing the similarities and differences.

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** Are there private permissionless networks that I missed or overlooked? Please let me know, and I’ll be happy to add them.

LTO Network

Combining private and public blockchains to solve the issues of data silos and data integrity for B2B. Scalable, GDPR compliant and ready to use. Relocated to:

Arnold Daniels

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Experienced web and blockchain developer - Helping you out, wherever I can ツ. Fierce believer in open-source. Living the Startup life.

LTO Network

Combining private and public blockchains to solve the issues of data silos and data integrity for B2B. Scalable, GDPR compliant and ready to use. Relocated to: